ORDER
V.G. Sabhahit, J.
Page 0234
1. This writ Petition under Article 226 of the Constitution of India is directed against the order passed by the Deputy Commissioner for Transport, Belgaum, dated 27/10/2005 in Appeal No. TXA/22/2004-05 wherein while dismissing the appeal, the Appellate Authority has confirmed the order passed by the Regional Transport officer .dated 07/02/2005.
2. The grievance of the petitioner in the Writ Petition is that the petitioner had purchased two vans bearing registration Nos. KA 22/A 3222 and KA 22/A 3444 under hire purchase agreement entered into with the third respondent-Bank. It is averred that the petitioner was put in possession of the said vehicles. The registration certificate issued by the Registering Authority shows the name of the petitioner as the owner and entry has been made in each of the certificate of registration of the vehicles regarding existence of hire purchase agreement with the third respondent-financier. Due to manufacturing defects in the vehicles, the petitioner could never operate the vehicles profitably and he could not regularly and punctually pay the hire charges and the third respondent-financier repossessed the vehicles pursuant to the hire purchase agreement on 09/05/2004. It is averred in the petitioner that since the petitioner is ceased to be the owner from 09/05/2004 and the vehicles were repossessed by “the” financier, no liability to pay tax on the said vehicles could be levied on the petitioner, as the financier has repossessed the vehicles and as per the hire purchase agreement, the financier has come in possession of the vehicles and the petitioner has ceased to be the owner.
3. I have heard the learned Counsel appearing for the petitioner.
4. The learned Counsel submitted that the petitioner was only a hirer under the hire purchase agreement and the moment the vehicles ware repossessed by the financier, the petitioner is ceased to be the owner and in view of the provisions of Section 2(30) of the Motor Vehicles Act, 1988, Owner means, a person in whose name the vehicle has been registered/ and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of & hire purchase, agreement, or an agreement of lease or an agreement of hypothecation/ the person in possession of the vehicle under that agreement and wherefore the petitioner is- ceased to be the owner and cannot be levied with tax pertaining to the above said vehicles after 09/05/2004 when the vehicles were repossessed by the third respondent-financier. He has relied upon the Division Bench decision of this Court in the case of Page 0235 Vijaya Kumar Mane v. R.T.O. Dhaswad and Ors. reported in 2004(2) Kar. L.J. 78. He has relied upon the observation made in page 85 of the Judgment wherein it is observed as follows:
similarly, every person who obtain/takes possession and control of the motor vehicle, is liable to pay the taxes due during the period when he was or is in possession and control and also all arrears due for the period of” to the data on which he obtained possession and control of the motor vehicle.
and the further observation made in para 8 is a follows:
If the owner himself pays the motor vehicle tax due in respect of a vehicle till the date on which he transfers or looses possession or- control of such vehicle, recovery of tax for the period prior to the date of transfer or the date of loosing possession and control of the vehicle, would never arise. It is trite that- the successor in interest would be liable to pay the motor vehicle tax as mandated in terms of Section 4 read with Section 3 of the Taxation Act, As already stated supra the liability to pay the tax cast on the owner of the vehicle is in no way diluted or minimized or taken away by the provisions of Sub-section (1) of Section 9. An additional liability is. created and fastened on any person who acquires ownership of such vehicle by way of transfer or any person who comas in possession or to have control of such vehicle. This position is made clear by unambiguous provisions of Sub-section (2) of Section 9 of the Taxation Act.
The learned Counsel -submitted that in view of the fact that the petitioner has ceased to be the owner of the vehicles from 09/05/2004, no liability to pay tax could be imposed on the petitioner and the order passed by the Appellate Authority confirming the order passed by the Regional Transport officer is liable to be set aside by absolving his liability to pay the tax.
5. On the other hand, the learned Additional Government Advocate appearing for respondents 1 and 2 submitted that the petitioner is the registered owner of the vehicles and in view of provisions of Sections 3, 4 and 9 of the Karnataka Motor Vehicles Taxation Act, 1957, (hereinafter referred as the Taxation Act) the registered owner is liable to pay tax and the decision relied upon by the leaned counsel for the petitioner in vijaya Kumar Mane’s case, the Division Bench of this Court has held that the registered owner is not absolved of his liability to pay tax even when the possession of the vehicle is repossessed by the hire purchaser and has relied upon the observations made in para 8 of the Judgment in vijaya Kumar Mane’s case supra. The learned Additional Government Advocate hag relied upon the decision of this Court in writ Appeal Nos. 2942/2004 and 5108/2004 wherein the Division Bench of this Court has confirmed the order passed by the learned single Judge of this Court wherein it is held that even after the vehicle is repossessed by the financier, registered Page 0236 owner continues to be liable to pay tax in view of the provisions of Section 9 of the Taxation Act.
6. I have considered the contentions of the learned Counsel appearing for the parties.
7. It is clear from the averment made in the petition itself that the petitioner is the registered owner of the vehicles bearing registration Nos. KA 22/A 3222 and KA 22/A 3444 as averred in para 2 of the writ petition. In view of provisions for ascertaining the liability of the petitioner to pay tax on the said vehicles of which he is the registered owner the provisions of Sections 3, 4 and 9 of the Taxation Act, 1957, has to be looked into. Section 4 of the Taxation Act, reads as follows:
4. Payment of Tax: Tax levied under Section 3 shall be paid in advance by the registered owner or person having possession or control of the motor vehicle.
and Section 9 of the Taxation Act dealing with the liability to pay arrears of tax states that
9. (1) if the tax leviable in respect of any motor vehicle remains unpaid by any person liable for the payment thereof and such person before having paid the tax has transferred the ownership of such vehicle or has ceased to be in possession or control of such vehicle/ the person to whom the ownership of the vehicle has been transferred or the person who has possession or control of such vehicle shall be liable to pay the said tax to the taxation authority.
(2) Nothing contained in this Section shall be deemed to affect the liability of the person/ who has transferred the ownership or has ceased to be In possession or control of the vehicle, to pay the said tax.
The above referred provisions of Taxation Act has been considered by the Division Bench of this Court in vijaya Kumar Mana’s case and in paragraph 8 it is held as follows:
We do not find any flaw or error either in the reasoning or conclusions recorded by learned Single Judge. The findings recorded by the learned Single Judge are In consonance with the provisions of Sections 4 and 5 of the Act. We are of the considered opinion that the Appellant/petitioner should be non-suited only on the basis of provisions of Sub-section (2) of Section 9 of the Taxation Act, Sub-section (1} of Section 9 of the Taxation Act does not relieve the ‘ owner from payment of motor vehicle tax when such owner ceased to be in possession or control of the vehicle in question.
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That means the liability fastened to the owner of the vehicle to pay the motor vehicle tax continues to exist ever after such owner looses possession and control of the vehicle and the possession and control of vehicle comes Into the hands of another person.
and therefore in view of the above said observations made by the Division Bench of this Court, it is clear that the contention of the-learned counsel Page 0237 appearing for the petitioner that since the petitioner, who is the registered owner, has ceased to be in possession of the vehicle, as the vehicle is repossessed by the financier, and is not liable to pay tax is cannot be accepted.
8. in view of the above said provision of Taxation Act, the definition of “owner” in the Motor vehicles Act, 1988, cannot be relied upon by the petitioner. Accordingly, I hold that there is no merit in the contention that the petitioner is not liable to pay tax, as he has ceased to be owner of the vehicles and the vehicles are repossessed by the financier. Accordingly, I hold that the order passed by the respondent that the petitioner is also liable to pay tax even after holding that the petitioner, who is the registered owner is liable to pay tax even after the financier repossessed the vehicle for the period commencing from 01/06/2004, is justified and the order does not suffer from any error or illegality as to exercise discretion of this Court under Article 226 of the Constitution of India.
9. Accordingly, the writ Petition is dismissed.